Business Plan Template

 business plan is a road map to gain financial support

 to navigate successfully through its own unique competitive environment
 Customers VS competitors
 In resource constrained environment ; focus on :
1. opportunity
2. competitive analysis
3. Management Team
4. Financial Expectation.
 Audience ;
Investors looking for long term potentials
Lenders - Riskiness, Payback period and cash flow data.

The Structure

1. Cover page and table of content

2. Executive summary
3. Business description analysis
4. Business environment analysis
5. Industry background
6. Competitive analysis
7. Market analysis
8. Marketing plan
9. Operation plan
10. Management summary
11. Financial plan

Executive Summary
Include:
1. Info about market & industry
2. Business opportunity
3. key strategies of success ; efficient distribution system than competitors
acquired strategic partners in the venture.
4. The financial potentials ; risk reward
5. The Management Team ; who will achieve result.
6. The resources & Capital requested ; clear statement to readers about what you hope to
gain from them, whether it is Capital or other resources.

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Business description
 It is another summary but focuses more directly on the business concept itself ; gives a
brief informative picture of the history, basic nature and purpose of your business.
 state clearly business objectives ; why the business will be successful introduce your
business in terms of its unique qualities and the positive business environment existing
for your product and services
 why your concept is exciting

Business environment analysis

 To understand industry, Competition Market

 To identify the real problem that solves real customer problem
 Show the readers what the opportunity is in the market and the industry; special
technology , new prospective or unique concept that will induce them to purchase your
product rather than your competitors

Industry Market
Group of companies where your product
Sell product/service to Market /service will be sold
Colleagues/ Competitors Opportunity/ Customers
REPRESENT
OPPORTUNITY

 The intersection between the two groups will indentify your business opportunity
 PESTEL is best for Microenvironment analysis.

Industry Background

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 Info about shape, size, trends and the key features of the industry & how your product
or service will fit into that industry
 Defining existing products & services ; what is the range of products or services
encompassed by this industry ?
 Sizing the industry; What is the industry production capacity, its unit sales, and overall
profitability ?
Is the industry spread out geographically?
 Identify important trends ; What is the predicated growth value ?
What new patterns of growth are emerging ?
What factors might contribute to future growth ?
 Anticipating barrier to entry; What are the obstacles block you from entering this
industry ?
What resources, skills to enter the industry ?
What restrictive federal regulation, Large Capital requirement, sophisticated technical
knowledge

Michael Porter's Five Forces:

 The fewer the supplier , usually more powerful; oil Market

fewer companies can set price.
Power of supplier

 Buyer concentration; With few big supermarkets, buyers are

Power of buyer supplied by much smaller businesses, buyer power are high.

 Is it easy to enter the market; start-up capital is low then the

Threat of entrants barriers are low and vis-versa.

 customer buy something else instead of your product; Apple Vs

Threat of substitutes Dell computers.

 Depends on number and capability of competitors determines

Power of competitors business Power>

Competitive Analysis

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 Identify your competitors ; the reader want to know who the direct & potential
competitors of your business.
 Strategic Groups ( Strategic Mapping ) ; identify organisation within the industry or
sector with similar strategic characteristics, following similar strategies or competing on
similar bases which can reduce the risk of failure for your business.
Who are the competitors ; which company solve the same problems for the customers ;
their products & services , their strength & weaknesses, Market share and marketing
strategies, Key success factors.
 Assessing threats from the competition
How much of threat are your competitors to your venture ?
1. Strong brand recognition
2. Aggressively block entrance of new rival
3. recognize your special differentiating attributes them from their own products or
service
 Identify competition and emphasizes competitive advantages ; Convenience, flexibility
and strategic alliances
 Anticipating barriers to entry; What are the obstacles block you from entering this
industry ? ; restrictive federal regulation, large capital requirement, sophisticated
technical knowledge
what sources, skills to enter the industry ?

Generic strategic options:

Advantage
Target Scope
Low cost Product uniqueness

Broad Cost leadership Differentiation

(industry Wide) strategy strategy

Narrow Focus strategy Focus strategy

(market Segment) (low cost) (differentiation)

Market Analysis

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 identify companies, people will choose to purchase your products and services because
you solve and meet the need
 Assessing the market's size & growth ; indicate how large is the market for your offer
consider two keys:
1- Is there room for your presence in that market ?
2- Can the market expand to include you ?
3- Will the market demand for your product or service grow ?
 Defining your target market ; who are your target customers, individuals and
companies?
 Anticipating your Value proposition; Why will customers in your target market purchase
your product or service ? that is your value proposition
example: Do you have a better- designed pillow to ease back pain?

Marketing Plan

 How can you encourage customers to buy from you ?

 Using your Marketing plan as round Map ; How will you intend to sell your product or
service , how will you motivate the customer to buy ?
 Developing your marketing Plan; customized service or guarantee something isnot
available elsewhere.
Keep viewing the opportunity from customer's perspective
How long will it take to reach the next sales milestone, sales over cost.
 Customer Buying behaviour; Where, When, Why and how do customer buy this product
& service
What needs are being fulfilled for them?
 Customer Loyalty ; How to position product in the market compared to competitors'
product
 4P's : Product, Price, Place (distribution), and Promotion
Place is more important; will be transported from the plant to the end user
Promotion ; 1- Word of mouth
2- Sales promotion; Coupons, samples
3- Direct Sales
4- Advertising

Operation Plan

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 Identify daily activities of the business & the strategies that support them.
 Operation plan has to be dynamic as the process of the production itself.
 Developed & modifies as needed
 OP should give critical success factors affecting how the company creates value to the
stakeholders of business, other factors:
1. Advantage in sourcing materials; inexpensive raw materials, cheap way of
transport.
2. Technological innovation in the manufacturing or distribution process.
3. Favourable geographic location; Good location for process.
4. Access to skilled/inexpensive labour
5. An effective pricing strategy

Management Summary

 Management team, that makes business work that brings pieces together
 Give the reader chance to know each team member will work to form an effective and
successful team, which will result in a successful & profitable business.

Financial Plan

 Investment committee wants to know whether the venture can achieve the company's
hurdle rate ( Minimum rate of rate expected to all projects)
 Specifying you capital requirements
 Investors what kind of return on investment the business will achieve
 Lenders Borrowing capacity, its ability to debt
 Highlights;
1. Operating Profit
2. Operating margin
3. Net income
4. Net margin over a period of three to five years
 show Cash flow , Peak times and availability. Cash flow is more important for new
venture.
 Document all assumption , sources , evidence and expert opinions. explaining your own
logic for choosing certain growth rate or cost of distribution.